American Wheels, Chinese Roads is Michael Dunne's remarkable
description of how General Motors rocketed up from the first vehicle
rolling off a Chinese assembly line in 1999 ("Job One" in industry
lingo) to market leadership there in 2005. Dunne, who has lived in
China and speaks fluent Chinese, is an automotive insider whose local
experience makes him uniquely qualified to explain to a Western
audience the rather tortured history of GM's partnership with Shanghai
Automotive Industry Corporation (SAIC). The native business culture
of indirection and evasion required a gigantic adjustment on the part
of relocated Detroit executives. "Upside-down" hardly suffices to
describe the foreignness of the Chinese market, where luxury models
dominate over economy vehicles, where most buyers pay cash and where
almost all cars sold are black. The tale of how GM's China subsidiary
managed to achieve such success at a time when the domestic operations
were marching towards insolvency makes for a gripping story. GM's
highly profitable, rapidly growing Chinese subsidiary saved the
disastrous North American operation from an even more ignominious
bankruptcy.

The dominant fact of Chinese business is that foreign companies must
form partnerships with local ventures, and SAIC already had a
successful partnership with Volkswagen when GM came on the scene. New
Partnerships furthermore must be approved by the central government --
except when they can be approved by the provincial or city
governments. The partnerships were often tense, and western managers
had to adjust to relationships were no decisions were ever final and
the parties' underlying motivations were often hard to discern. One
of the book's most entertaining chapters relates how Peter Badore of
Chrysler turned the tables on his Chinese counterparts in Beijing
Jeep, achieving something of a moral victory at the same time he
created profits for his company. Dunne vividly relates how other
foreign managers like Philip Murtaugh and Rick Swando developed
cordial and mutually beneficial working relationships with their
Chinese counterparts.

The historic prestige of the Buick brand and General Motors names
in China will be a humorous surprise to American readers. Despite the
author's focus on GM's partnerships, the side stories of all-Chinese
upstarts like Geely and Chery are the most intriguing. While
government-sanctioned foreign partnerships were struggling to import
the engineering know-how to create entirely new models, Geely and
Chery forged brashly ahead.
Notably Geely
purchased Volvo in 2010, and in 2003, Chery managed to ship a
Chevy Spark (branded the "QQ") before General Motors
did. American Wheels, Chinese Roads prognosticates a bright
future for Chinese car-makers in foreign markets, but brands like the
electric Coda
and
the Buffett-backed
BYD have struggled to gain a foothold here.

Informative graphics accompany the text, but are never never discussed
or explicated. As with so many recent volumes, the book suffers from
an unfortunate lack of editing. The pages have some unnecessary
repetition of facts in some places, and then in others, allusion to
entities whose identity and significance is never explained. Dunne
worked hard to avoid writing a memoir, and always refers to himself in
the 3rd person or anonymously, to the extreme that he does not mention
that Timothy Dunne of Automotive Resources Asia is obviously his
brother working in his employ.

Happily, Dunne brings the narrative to life by focusing individual
chapters on stories of particularly significant individuals or
business developments. The timeline does consequently jump around,
but the overall thread of the narrative is coherent. American
Wheels, Chinese Roads will be a lively but quite sobering read
for any businesspeople contemplating operations in China.

Thanks to John
J. Zhuang, Rutland Group for
sending me the link to an
(indirectly sourced) China Economic Review article which mentions the
book.